Search results

1 – 10 of over 5000
To view the access options for this content please click here
Article

Sukhdev Singh, Jasvinder Sidhu, Mahesh Joshi and Monika Kansal

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on…

Abstract

Purpose

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on assets (ROA). The paper also compared the intellectual capital performance of public sector and private sector banks.

Design/methodology/approach

This study is based on secondary data from the top 20 Indian banks. Ten banks were selected from each of the public and private sectors on the basis of paid-up equity capital. The analysis was made using the value added intellectual coefficient, the coefficient of variation, exponential growth rates, trend analysis, Yule’s coefficient, the coefficient of correlation, the F-test and the t-test.

Findings

The study revealed that private sectors have performed relatively better regarding the creation of total information coefficient (IC). However, the ROA was still below the international benchmark of > 1 percent. The major cause of the lower IC and the reduced ROA is disproportionate to the increase in capital employed and escalating non-performing assets in the Indian banking sector.

Practical implications

The study focussed on managers and identified the causes of lower performance. It proposed numerous strategies to improve the aggregate score of IC, which is closely related to bank profitability.

Originality/value

This is the first study to make a comparative analysis of intellectual capital performance in public and private sector banks in India and in addition to the traditional style of measuring sectoral performance. Further, the study employed new statistical tools, such as Yule’s coefficient of association, to establish the association between performance variables.

Details

Managerial Finance, vol. 42 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article

Mohammad Alipour

The purpose of this paper is to analyze the role of intellectual capital (IC) and its relationship with financial performance of Iran insurance companies during the period

Abstract

Purpose

The purpose of this paper is to analyze the role of intellectual capital (IC) and its relationship with financial performance of Iran insurance companies during the period 2005‐2007.

Design/methodology/approach

In total, 39 insurance companies were selected as the sample. Regression model (partial least squares) has been applied to examine the relationship between IC and companies' return on assets ratio (ROA).

Findings

The results of the research revealed that value added intellectual capital and its components have a significant positive relationship with companies' profitability.

Practical implications

The VAIC™ method could be an important means for many decision makers to integrate IC in their decision‐making process, which allows insurance companies to benchmark themselves according to the IC efficiencies and develop strategies to enhance their company's performance.

Originality/value

This is the first research, which has used the data on value added recently calculated and published by Iran insurance firms in the “Value Added Scoreboard”.

Details

Measuring Business Excellence, vol. 16 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

To view the access options for this content please click here
Article

Pirjo Ståhle, Sten Ståhle and Samuli Aho

The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

Abstract

Purpose

The purpose of this study is to analyse the validity of the value added intellectual coefficient (VAIC) method as an indicator of intellectual capital.

Design/methodology/approach

The paper describes VAIC through its calculation formulae and aims to establish what exactly it is that the method measures. It also looks in detail at how intellectual capital is understood in the method, and discusses its conceptual confusions. Furthermore, the paper tests the hypothesis according to which VAIC correlates with a company's stock market value, and reflects the contradictory results of earlier studies.

Findings

The analyses show, first, that VAIC indicates the efficiency of the company's labour and capital investments, and has nothing to do with intellectual capital. Furthermore, the calculation method uses overlapping variables and has other serious validity problems. Second, the results do not lend support to the hypothesis that VAIC correlates with a company's stock market value. The main reasons behind the lack of consistency in earlier VAIC results lie in the confusion of capitalized and cash flow entities in the calculation of structural capital and in the misuse of intellectual capital concepts.

Practical implications

The analyses show that VAIC is an invalid measure of intellectual capital.

Originality/value

The result is important since the method has been widely used in micro and macro level analyses, but this is the first time it has been put to rigorous scientific analysis.

To view the access options for this content please click here
Article

G.E. Swartz, N‐P. Swartz and S. Firer

The debate on the determinants of firm value is ongoing; and the increasing gap in the book‐to‐market ratio (Lev & Sougiannis 1999) has yet to be explained in the…

Abstract

The debate on the determinants of firm value is ongoing; and the increasing gap in the book‐to‐market ratio (Lev & Sougiannis 1999) has yet to be explained in the financial literature. This article contributes to the debate by examining whether intellectual capital measured using the value added intellectual coefficient (VAICTM) (Pulic 1998) contributes to the explanation of the book‐to‐market ratio. This study used Ohlson’s 1995 valuation model and JSE Securities Exchange (SA) (JSE) data in an attempt to identify whether the book value of assets, accounting (accrual) earnings and VAICTM explain the behaviour of South African share prices. The panel data least squares model results indicate a significant relationship between share prices three months after year end, and abnormal earnings, abnormal cash dividends, book value of assets, the capital employed coefficient, and the human capital coefficient.

To view the access options for this content please click here
Article

Daniel Zéghal and Anis Maaloul

The purpose of this paper is to analyse the role of value added (VA) as an indicator of intellectual capital (IC), and its impact on the firm's economic, financial and…

Abstract

Purpose

The purpose of this paper is to analyse the role of value added (VA) as an indicator of intellectual capital (IC), and its impact on the firm's economic, financial and stock market performance.

Design/methodology/approach

The value added intellectual coefficient (VAIC™) method is used on 300 UK companies divided into three groups of industries: high‐tech, traditional and services. Data require to calculate VAIC™ method are obtained from the “Value Added Scoreboard” provided by the UK Department of Trade and Industry (DTI). Empirical analysis is conducted using correlation and linear multiple regression analysis.

Findings

The results show that companies' IC has a positive impact on economic and financial performance. However, the association between IC and stock market performance is only significant for high‐tech industries. The results also indicate that capital employed remains a major determinant of financial and stock market performance although it has a negative impact on economic performance.

Practical implications

The VAIC™ method could be an important tool for many decision makers to integrate IC in their decision process.

Originality/value

This is the first research which has used the data on VA recently calculated and published by the UK DTI in the “Value Added Scoreboard”. This paper constitutes therefore a kind of validation of the ministry data.

Details

Journal of Intellectual Capital, vol. 11 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article

Stevo Pucar

The purpose is to analyze the impact of intellectual capital (IC) on export performance of firms and industries.

Abstract

Purpose

The purpose is to analyze the impact of intellectual capital (IC) on export performance of firms and industries.

Design/methodology/approach

This research used value added intellectual coefficient (VAIC) to measure intellectual capital as an independent variable. An export performance, as dependent variable, was measured as growth of exports. The sample consisted of 134 firms in Bosnia and Herzegovina (B&H). Empirical analysis was done by linear regression analysis.

Findings

The results of regression analysis show a significant (p<0.01), positive influence of the value added intellectual coefficient and its components on the export growth in the sector of food and beverages and manufacturing of furniture and wood products in B&H. For other sectors there is no significant relation of independent and dependent variable.

Practical implications

The results correspond with the results of the EU project that determined competitive advantages of B&H by Michael Porter's methodology. Results of this research raise the possibility of further testing of the author's methodology, called the measurement of intellectual capital in export performance (MICEP) methodology, in determining the competitive advantages, because it took considerably less time and money than EU project methodology. Also, a strong influence of IC on the export performance of sectors with competitive advantages opens the way for industrial policies based on intellectual capital, not only in B&H, but in other countries.

Originality/value

This is the first research that has measured the impact of intellectual capital on export performance by using the VAIC methodology.

Details

Journal of Intellectual Capital, vol. 13 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article

Ranjit Tiwari

This study seeks to understand the nexus between intellectual capital and profitability of healthcare firms in India with interaction effects.

Abstract

Purpose

This study seeks to understand the nexus between intellectual capital and profitability of healthcare firms in India with interaction effects.

Design/methodology/approach

Relevant data were extracted from the Centre for Monitoring Indian Economy (CMIE)'s Prowess database for a period of ten years 2009–2018 for a sample of 84 selected firms from the healthcare industry. This study uses value added intellectual coefficient (VAIC) and modified value added intellectual coefficient (MVAIC) as a measure of intellectual capital. Further, the study employs panel regression techniques to explore the relationship between intellectual capital and profitability.

Findings

The empirical findings reveal that the intellectual capital coefficient of healthcare firms in India averages 2.7757. It is also observed that a majority of the healthcare firms' intellectual capital coefficient is below the industry average. From the regression analysis, it is evident that the intellectual capital coefficient is positively related to the profitability of healthcare firms in India. As far as the components of intellectual capital coefficient are concerned, the capital employed coefficient (CEC) is the only component driving the profitability of healthcare firms in India. A further introduction of interaction terms improves model explainability and moderates the impact of the predictor variable on the response variable. Furthermore, it is observed that the intellectual capital coefficient of the healthcare industry is immune to changes in political regimes in India.

Practical implications

The findings reveal that intellectual capital is an important driver of corporate performance, thus healthcare firms in developing economies like India need to enhance their intellectual potential. Therefore, corporates and governments in developing economies should stimulate investments in developing intellectual capital for enhanced corporate performance and economic growth. Thus, this study might be used as a reference by policymakers while drafting the future policy for the development of intellectual capital in general and healthcare sector specifically.

Originality/value

This is among the first few studies to explore such an empirical relationship for healthcare firms in India and among the few studies of this kind across the globe. It also makes novel contributions in considering interaction variables and seeking the consistency of results across different political regimes. However, the study examines one nation and one industry; thus, the generalisation of findings requires caution.

Details

Journal of Intellectual Capital, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1469-1930

Keywords

To view the access options for this content please click here
Article

Gianpaolo Iazzolino, Domenico Laise and Giuseppe Migliano

This study proposes a comparison between Value Added Intellectual Coefficient (VAIC) and one of the most important performance evaluation methods, the Economic Value Added

Abstract

Purpose

This study proposes a comparison between Value Added Intellectual Coefficient (VAIC) and one of the most important performance evaluation methods, the Economic Value Added (EVA), starting from a re-interpretation of the VAIC.

Design/methodology/approach

The empirical data were gathered from AMADEUS Bureau van Dijk and consist of 2,596 companies operating in Northern Italy, from six different economic sectors, observed for the year 2011. A correlation analysis was carried out in order to highlight whether there is a relationship between the two concepts of VAIC and EVA.

Findings

Results show that EVA and VAIC have no significant relationships; as a matter of fact, EVA is based on financial theory, whereas VAIC is focalised on the assessment of Intellectual Capital Efficiency (ICE).

Practical implications

Managers could be misled due to the fact that they often make decisions by taking into account only financial indicators such as EBIT, EVA, etc. Although methods like EVA have improved modern accounting systems, they do not take into account information linked to ICE. Therefore, these two perspectives can be useful in a context in which firms' performances are measured through multi-criteria methodologies (i.e. Balanced scorecard).

Originality/value

The proposal describes the differences between VAIC and EVA considering these two concepts as not contrasting. In fact, in order to better measure firms' performances, it could be useful to consider VAIC and EVA as an integrated vision in order to develop multi-criteria evaluation systems, rather than consider them separately.

Details

Measuring Business Excellence, vol. 18 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

To view the access options for this content please click here
Article

Danila Ovechkin, Natalia Boldyreva and Vladimir Davydenko

The aim of this paper is to propose extended intellectual capital (IC) indicators. The study shows that the essence of IC in the context of value is residual income, its…

Abstract

Purpose

The aim of this paper is to propose extended intellectual capital (IC) indicators. The study shows that the essence of IC in the context of value is residual income, its growth rate and growth rate of equity taken together. It allows creating IC measures (modified residual income and economic value added of equity) that contain these components. The study investigates the relationship between IC and market value for Russian public firms.

Design/methodology/approach

The authors propose modified residual income and modified economic value added of equity as IC metrics. This study tests a relationship between market value and IC to investigate suggested metrics. Static and dynamic panel data models are used. 25 companies from the MOEX Russia Index were included in the study. The study covers the period from 2014 to 2018.

Findings

The findings show a strong positive relationship between market value and IC. The results confirm that extended IC measures have a stronger connection to market value.

Practical implications

Firstly, these results benefit managers. They can use proposed extended IC measures as targets for the company when planning business strategy and generating business environment. Secondly, suggested IC measures can help shareholders and investors achieve their long-term goal – wealth maximization.

Originality/value

The value of this article is the development of IC theory and valuation. The proposed measures differ in the way that they consider the growth rates – the main determinants of value along with efficiency.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

Keywords

To view the access options for this content please click here
Article

Ming‐Chin Chen, Shu‐Ju Cheng and Yuhchang Hwang

The purpose of this article is to investigate empirically the relation between the value creation efficiency and firms’ market valuation and financial performance.

Abstract

Purpose

The purpose of this article is to investigate empirically the relation between the value creation efficiency and firms’ market valuation and financial performance.

Design/methodology/approach

Using data drawn from Taiwanese listed companies and Pulic's Value Added Intellectual Coefficient (VAIC™) as the efficiency measure of capital employed and intellectual capital, the authors construct regression models to examine the relationship between corporate value creation efficiency and firms’ market‐to‐book value ratios, and explore the relation between intellectual capital and firms’ current as well as future financial performance.

Findings

The results support the hypothesis that firms’ intellectual capital has a positive impact on market value and financial performance, and may be an indicator for future financial performance. In addition, the authors found investors may place different value on the three components of value creation efficiency (physical capital, human capital, and structural capital). Finally, evidence is presented that R&D expenditure may capture additional information on structural capital and has a positive effect on firm value and profitability.

Originality/value

The results extend the understanding of the role of intellectual capital in creating corporate value and building sustainable advantages for companies in emerging economies, where different technological advancements may bring different implications for valuation of intellectual capital.

Details

Journal of Intellectual Capital, vol. 6 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

1 – 10 of over 5000